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A fixed-rate mortgage is no longer a guarantee of protection from rising housing costs, with the soaring cost of property taxes and insurance taking a bigger bite out of the monthly budgets of millions of homeowners.
After a record 14 percent increase in 2024, average property insurance costs on single family-homes are up 61 percent over the past five years, to $2,290, according to the latest ICE Mortgage Monitor report out Monday.
Rising home prices have pushed average property taxes up by 27 percent nationwide in the last 5 years, to $3,018 — and by more than 40 percent in states including Alabama, Colorado, Florida and Georgia, according to data aggregator CoreLogic.
The $1,521 combined increase in annual property taxes and insurance since 2019 means the average homeowner is paying about $442 a month on property taxes and insurance — an increase of $127 from five years ago.
Bernice Ross
“In fact, in many parts of the country, insurance and property tax expenses are now higher than a mortgage payment,” BrokerageUP CEO Bernice Ross wrote in February. “That’s certainly the situation I found myself in when my current carrier almost doubled both my homeowner and auto insurance (they’re bundled together).”
Taxes and insurance are a concern for homebuyers, who must satisfy their mortgage lender that they have enough monthly income to cover their “PITI” (principal, interest, taxes and insurance).
Ross says helping their homebuyer clients save money on insurance policies “may be one of the most important ways that agents can bring value to their buyers and justify the commissions they earn.”
ICE’s research suggests homeowners are coping with rising insurance not only by shopping around, but by settling for higher deductibles.
Homeowners taking out mortgages in 2024 had average property insurance deductibles of $390 — 19 percent higher than the average for homeowners with existing mortgages.
Andy Walden
“As borrowers become more interested in shopping for the best insurance rates, there is an emerging opportunity for lenders and servicers to meet this need with embedded insurance comparison tools both at the front end of the pipeline and for people with existing mortgages,” ICE’s Andy Walden said in a statement.
Walden said integrations with insurance providers in ICE’s mortgage origination and servicing platforms, “have been aimed at exactly this opportunity as part of our continuing goal of making home finance as simple and transparent as possible.”
As for property taxes, rising home values can drive property assessments and tax bills higher, although cities and counties can provide relief by lowering property tax rates.
As policymakers, lawmakers and taxpayers explore equitable ways of providing relief, Florida Gov. Ron DeSantis has floated the idea of eliminating property taxes altogether.
The Florida Policy Institute calls the idea a “risky proposition” that would make it harder for local governments to provide basic services like schools, fire and police services without the $43 billion in revenue raised by property taxes.
Florida would need to double its sales tax to 12 percent to raise that much revenue, which would be the highest in the nation, "disproportionately and negatively impacting households with low to moderate incomes," the Florida Policy Institute noted in a Feb. 22 analysis.
North Dakota voters in November rejected a ballot measure that called for abolishing property taxes, with 63.5 percent of residents voting against the idea.
Rising home values have an impact on insurance policies as well, since costlier homes cost more to repair or replace. ICE found that the average cost per $1,000 of coverage, which averaged $4.66 between 2014 and 2022, jumped to $5.40 last year.
Average insurance premium per $1,000 of coverage
Source: ICE Mortgage Monitor, March 2025.
"While a number of factors are likely contributing to the increase, the rising cost of rebuilding in the wake of increasingly frequent natural disasters is likely at least partly to blame," ICE's analysis concluded.
Miami ($17.20), New Orleans ($16.80) and Oklahoma City ($10.10) had the highest cost per$1,000 of coverage, compared to $2.90 in San Jose, Las Vegas and Buffalo, N.Y.
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